Fed Decision to Decide Gold’s Fate: Dovish Surge or Hawkish Collapse?
Key Scenario: The Fed’s Decision Will Determine Gold’s Fate The crux of the matter regarding the decision does not lie in whether or not interest rates will be raised, but rather in the updated economic forecast dot plot and the Fed Chair’s remarks on the future interest rate path during the press conference.
A: Dovish reassurance (e.g., implying that current inflation is under control and the tightening cycle is nearing its end) Market Outlook: This would immediately trigger a “gold bull run” as bearish expectations are realized.
Technical Development: 4-hour bulls will ignore resistance from moving averages above, breaking through the middle Bollinger Band at $4,436.41 with a large bullish candle, rapidly recouping lost ground in a short time, and making a frantic push toward the 4-hour upper Bollinger Band at $4,572.27 or even the previous all-time high of $4,680+. Probability Assessment: Moderate. If official authorities downplay inflation expectations, previously over-positioned short sellers will collectively panic-sell to close their positions.
B: Hardline hawkish stance (upward revision of the year-end interest rate forecast, emphasizing determination to combat inflation) (Market Trend: The rally will come to an abrupt halt, triggering a second test of the lows or even a breakout and collapse.
Technical Development: The current high-volume rebound on the 4-hour chart will face frenzied selling by institutions after hitting the $4,365–$4,380 resistance zone (the dense distribution zone on both the daily and 4-hour charts). The gold price will instantly reverse downward, not only erasing all of today’s gains but also breaking directly through the 4-hour lower band at $4,300.59, with the medium-term trend seeking a bottom at $4,230 / $4,150. Probability Assessment: High. Under the rigid pressure of high oil prices and a 5% U.S. Treasury yield, the Fed is unlikely to easily yield to market pressures.
Given that the moment the decision is announced (early morning Beijing time) is typically accompanied by extreme market conditions—such as “wild spikes up and down and two-way washouts”—it is not advisable to take heavy positions in advance to “bet” on a specific direction. Instead, adopt a “wait-and-see” strategy of following the market!
Once the market stabilizes, you can choose to enter the market, maintaining a focus on sell orders! $Gold - main 2612(GCmain)$$XAU/USD(XAUUSD.FOREX)$
Markets are always moving - and sometimes, the best move is knowing what works for you.
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